Artisanal Mining in Somaliland: Opportunity, Risk, and Reality

Artisanal and small-scale mining (ASM) plays a significant role in Somaliland’s informal economy, particularly in gold-bearing regions where formal mining infrastructure remains limited. For many communities, artisanal mining represents a primary source of income and an accessible means of participating in the global gold value chain. Any discussion of mining in Somaliland must therefore begin with an honest recognition of the importance of ASM as both an economic activity and a social reality.

At the same time, artisanal mining operates in a complex space where opportunity and risk coexist. Informal miners often work without geological guidance, safety standards, environmental controls, or access to formal markets. This combination exposes miners and surrounding communities to health hazards, environmental degradation, and economic exploitation—despite the value of the gold being produced.

The Economic Role of Artisanal Mining

Artisanal mining provides employment where alternatives are limited. In many rural areas, it offers immediate income without the capital requirements associated with formal mining operations. The sector supports not only miners, but also transporters, traders, food vendors, and local service providers. In this sense, ASM functions as an important livelihood system rather than a marginal activity.

However, the same informality that allows easy entry also limits long-term benefit. Artisanal miners typically sell gold into opaque local trading networks, often at discounted prices due to lack of access to international markets, certification, or accurate pricing information. As a result, value is lost at the source, and local miners capture only a fraction of the gold’s true market worth.

Health and Environmental Risks

One of the most pressing challenges associated with artisanal mining is the improper use of processing chemicals, particularly mercury and, in some cases, cyanide. Without technical training or controlled facilities, these substances are often handled in unsafe conditions, leading to serious health risks for miners and downstream environmental impacts on soil and water sources.

Mercury exposure has well-documented long-term effects, including neurological damage, while uncontrolled cyanide use can contaminate ecosystems and water supplies. These risks are rarely the result of negligence; rather, they stem from a lack of access to safer processing alternatives and technical knowledge.

Why Informality Persists

The persistence of artisanal mining is not a failure of regulation alone. It reflects gaps in infrastructure, capital availability, technical capacity, and trust between communities and formal institutions. In the absence of industrial processing facilities, legal offtake channels, or inclusive development models, informal mining fills a vacuum.

Attempts to eliminate artisanal mining without providing alternatives will prove ineffective and, in most cases, counterproductive. Sustainable solutions require engagement, integration, and gradual formalization rather than displacement.

From Risk to Opportunity Through Formalization

Formal mining operations, when responsibly designed, can play a constructive role in addressing many of the challenges associated with ASM. Industrial processing facilities reduce environmental risk, improve gold recovery, and create safer working conditions. More importantly, they open pathways for artisanal miners to participate in formal markets through toll processing, cooperative models, or structured supply arrangements.

When combined with genuine community engagement, such approaches can transform artisanal mining from a high-risk informal activity into a more stable and transparent economic contributor.

A Realistic Path Forward

The future of gold mining in Somaliland will not be defined by geology alone. Social acceptance, environmental responsibility, and economic inclusion are equally critical. Artisanal mining is not a problem to be ignored or suppressed, but a reality to be understood and responsibly integrated into broader mining ecosystems.

Companies operating in Somaliland must therefore approach ASM with nuance—recognizing both its value and its limitations. By aligning technical expertise, modern processing, and community collaboration, it is possible to reduce risk while unlocking greater shared benefit from the region’s gold resources.